The EU Pay Transparency Directive — what changes for companies of 100 to 500 people

The EU Pay Transparency Directive (2023/970) does not have a small company exemption. A company with 150 employees in Lyon, Madrid, or Frankfurt faces the same core obligations as a multinational with 50,000 people. The reporting timelines differ slightly by headcount. The substance does not.

This is the part most SMEs have not fully absorbed yet.

National transposition across EU member states is due by 7 June 2026. For companies between 150 and 499 employees, the first pay gap reporting cycle opens the same year. This article maps what changes operationally — not as a legal interpretation, and not as a compliance certification, but as a structural map of what the directive actually requires and where the preparation gap tends to appear.

What are the three obligation areas?

The directive creates obligations in three areas. What you disclose to candidates before they interview. What employees can request about their colleagues' pay. And what you report to national authorities every year.

They are connected. The infrastructure that makes one possible is largely the same infrastructure that makes the others possible. Companies that build it once can answer all three. Companies that have not built it will find each one harder than it looks.

What changes before hire?

Under Article 5, two things happen. Candidates cannot be asked about their salary history — the question that has anchored almost every job offer in Europe for the past twenty years is prohibited. And a salary range must be provided for every advertised role before the first interview.

Not a range you construct in the moment. A documented salary range, derived from a consistent pay band framework, based on objective and gender-neutral criteria. For companies that have defined pay bands, this is a 30-second disclosure. For companies that have set salaries offer by offer, it requires building a structure that was never there.

The salary range disclosure is not the hard part. Knowing what the salary range should be — and being able to justify it — is the hard part.

What can employees request?

Article 7 gives any employee the right to request the average pay of colleagues doing equal work or work of equal value, broken down by sex. The response must be provided within two months. The request cannot result in any adverse treatment.

Work of equal value is defined by four criteria: skill, effort, responsibility, and working conditions. Two roles with completely different titles and daily tasks can be comparable under this definition if their aggregate weight across those four dimensions is similar. The comparator is not the job title. It is the evaluated weight.

For a company with no documented job evaluation methodology, an Article 7 request has no structured answer. The salary data exists. The framework that makes comparison possible does not.

What must you report annually?

Article 9 requires annual reporting of nine pay gap metrics to national authorities, broken down by category of worker. The category is not the org chart. It is a group of employees doing work of equal value — defined by job evaluation, not by department.

Companies with 150 to 499 employees report from 2026. Companies with 100 to 149 from 2027.

If the pay gap in any category exceeds 5% and cannot be explained by objective, gender-neutral criteria, a joint pay assessment is mandatory under Article 10. That assessment requires documentation that should have existed before it was triggered — the evaluation methodology, the pay criteria, the basis for every category boundary.

The infrastructure underneath all three obligations

Three things sit beneath every obligation in the directive.

Job architecture. Documented job families, levels, and the criteria that distinguish them. Without this, category construction for Article 9 reporting is not possible, Article 7 responses have no structured comparator, and salary range disclosures cannot be derived from anything consistent.

Gender-neutral pay criteria. Every pay decision — initial offer, promotion, annual increase — should be traceable to criteria that are objective and documented. Not by assumption. By documentation. This is what Article 6 requires: that the criteria used to set pay are accessible to employees and free of gender-related factors.

A salary range per role and level. A documented minimum and maximum for every role, applied consistently across all candidates and all employees. This is the operational expression of the principle of equal pay. Without it, both Article 5 and Article 7 produce answers that cannot be defended.

Where do most companies sit right now?

The difference between Position 1 and Position 3 is not company size. It is whether pay decisions were ever made against a documented structure — or only against individual negotiation and whatever the market seemed to suggest that month.

Where does pay diagnostic work actually start?

The smallest observable step is understanding which position your company currently occupies — across the five principal obligation axes of the directive, not all at once.

ReadinessCheck™ takes about 20 minutes and requires no salary data. It produces an observational position view by axis — including job architecture, salary range readiness, pay criteria documentation, and reporting infrastructure — with the patterns that are hardest to close identified first.

It is not a legal opinion. It is not a compliance certification. It is a structured observation, useful in deciding where to direct the next month of preparation.